Siddharth World Trade Private Limited & Ors.

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Through Videoconference

IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH, COURT - II

CP (IB) 4289/MB/2018

Under section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy

(Application to Adjudicating Authority) Rules, 2016

In the matter of Edelweiss Asset Reconstruction Company Limited Registered office :- Edelweiss House, off CST Road, Kalina, Mumbai – 400098.

..…Petitioner

Versus

M/s Siddharth World Trade Private Limited & Ors. [CIN :- U15202GA2008PTC005652]

…..Respondent Order Delivered on : 13.05.2021

Coram:

Mr. H.P. CHATURVEDI : HON’BLE MEMBER (J)

Mr. RAVIKUMAR DURAISAMY : HON’BLE MEMBER (T)

NCLT, MUMBAI BENCH,COURT – II, CP (IB) 4289/MB/2018

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Appearances:

For the Petitioner: Mr. Prakash Shinde, a/w Mr. Rohan Agrawal, Advocates, i/b MDP & Partners For the Respondent: None Present Per: H.P. Chaturvedi , Member (Judicial)

ORDER

1. This is a Company Petition filed on 06.11.2018, under section 7

of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking to

initiate Corporate Insolvency Resolution Process (CIRP) against

M/s Siddharth World Trade Private Limited, ("the Respondent")

alleging default in payment of a Financial Debt.

2. The Respondent is a Private Company and incorporated on

08.03.2008 under the Companies Act, 1956.

3. The Authorized Share Capital of the Respondent/Corporate

Debtor Company is Rs. 100,00,000/-, Paid Up Share Capital is

Rs. 100,00,000/-.

4. The facts in brief of the Petitioner are as follows: -


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(a) The total amount outstanding to initiate the Corporate

Insolvency Resolution Process (CIRP) against the

Respondent is Rs. 92,01,03,572 Crores (Rupees Ninety Two

Crores One Lakh Three Thousand Five Hundred and

Seventy Two Only) as on 31.10.2018. The date of default is

30.03.2012 and the Account was classified as NPA on

30.06.2012.

(b) The Bank of India being the Assignor of debt to the Petitioner

herein vide Sanction Letter dated 03.11.2009 granted the

following Credit Facilities to the Corporate Debtor :-

Sr. No. Types of Facilities Amount (Rs.)

1. Term Loan 26,00,00,000/-

2. Cash Credit 10,00,00,000/-

Total 36,00,00,000/-

(c) The Corporate Debtor entered into a Hypothecation Loan

Agreement with Bank of India on 30.03.2011.


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(d) The Corporate Debtor entered into a Term Loan Consortium

Agreement with the Bank of India and Canara Bank.

(e) The Corporate Debtor entered into a Loan Agreement for

Cash Credit Facilities with Bank of India on 30.03.2011.

(f) In addition to the aforesaid, certain additional securities were

also created by the Corporate Debtor to the Bank of India

and Canara Bank.

(g) On 22.12.2009, a Mortgage by deposit of title deeds over an

Industrial Plot and Building situated in Kolhapur was

executed.

(h) A Joint Deed of Hypothecation of Plant and Machinery,

Furniture and Fixtures and other Fixed Assets on 12.12.2009

was executed by the Corporate Debtor in favour of Bank of

India.

(i) A Hypothecation-cum-Loan Agreement dated 30.03.2011

hypothecating all tangible movable machineries, plant assets

and stocks was executed by the Corporate Debtor in favour of

Bank of India.

(j) A Inter-se Agreement hypothecating Plant and Machinery,

Furniture and Fixture and other fixed Assets dated

12.12.2009 was executed between Bank of Baroda and

Canara Bank.


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(k) The Credit Facilities were also secured by the Personal

Guarantees by Mr. D.G. Salunkhe and one Mr. Uday

Bhosale dated 30.03.2011 guaranteeing the repayment of the

additional loan of Rs. 10,00,00,000/- Crores for meeting

working capital requirements. The estimated value of the

aforementioned securities is approximately Rs. 20.19. Crores.

(l) A Demand Promissory Note executed in favour of the

Lenders dated 30.03.2011 was issued by the Respondent.

(m) The Corporate Debtor has acknowledged its Debt on the

Acknowledgement Letters dated 15.06.2012 which is signed

by Mr. D.G. Salunkhe and one Mr. Uday Bhosale.

(n) Bank of India issued a notice under section 13 (2) of the

Securitisation Act, 2002 to the Corporate Debtor.

(o) The Petitioner has also produced the CIBIL Report.

(p) The Petitioner through its Advocate issued recall notices to

the Corporate Debtor dated 04.03.2014 for claiming the Loan

amount of the Respondent however, nothing fructified.

(q) The above debt got assigned to the Financial Creditor vide

Assignment Agreement dated 26.03.2014.

(r) The Respondent vide its letter dated 27.05.2015 sent a

proposal for settlement of dues with the Petitioner. In


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response to the Settlement proposal, the Petitioner vide their

letter dated 09.08.2018 cancelled the Settlement Scheme.

(s) The Corporate Debtor had made part payment in terms of

Cash Credit Loan Account on 18.03.2017 amounting to Rs.

2,56,921/-. The Corporate Debtor also made a part payment

in terms of Term Loan Account on 18.03.2017 amounting to

Rs. 7,43,079/-.

NO SUBMISSIONS/REPLY BY THE CORPORATE DEBTOR

5. The present petition is filed under Section 7 of I & B Code filed in

the year 2018. Although the matter was called for hearing on

several occasions. None appeared for the Respondent/Corporate

Debtor nor any Reply has been filed despite Petitioner made

several attempts of services as well as substitute service by way of

paper publication. This clearly indicates that the Corporate Debtor

has nothing to say in matter. In view of such factual position, the

matter was heard exparte on its merits.

FINDINGS

6. We duly considered the submissions made by the Learned Counsel

for the Petitioner and have gone through the pleadings and

documents available on record. It is evident that the Respondent

availed Loan amount Rs. 92,01,03,572/-. The Bank of India being

the Assignor of debt to the Petitioner granted Credit facilities of


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Rs.36,00,00,000/- to the Respondent vide an assignment

agreement dated 26.03.2014. The date of default occurred on

30.03.2012 and the account was classified as NPA on 30.06.2012.

7. The applicant has clearly demonstrated by placing a copy of the

Assignment Agreement dated 26.03.2014 that there was an

Agreement between the Petitioner and the Respondent for a total

sum of Rs. 36,00,00,000/-.

8. A perusal of the submission filed before this Bench clearly brings

out that the loan was disbursed in two tranches of Rs.

26,00,00,000/- as Term Loan and Rs. 10,00,00,000/- as Cash

Credit facilities. Therefore, it is confirmed that the total amount

of Rs. 36,00,00,000/- was disbursed to the Respondent.

9. The Petitioner submits that the amount disbursed to the

Respondent is corroborated in the Bank of India, Ichalkaranji

Branch by the Petitioner in accordance with the Bankers Books

Evidence Act, 1891.

10. Consequent to the default occurring a loan recall notice dated

04.03.2014 was sent by the Petitioner to the Respondent. A letter

to this effect has been placed on record by the Applicant in his

Petition.


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11. Ongoing through the submissions made by the Learned

Counsel for the Petitioner, the Respondent has acknowledged the

disbursement of loan and its liability to repay vide letter dated

15.06.2012. The Petitioner has also placed on record acceptance of

the Settlement letter by the Respondent whereby they have

accepted their liability to pay to the Petitioner.

12. Although the NPA was declared in respect of Corporate Debtor

in 2012, but the Corporate Debtor kept on acknowledging its Debt

in its correspondence letters with the Bank and also the

Respondent had made part payment of Rs. 10,00,000/- (Rupees

Ten Lakh only) towards loan liability in the year 2017 while the

present IB petition is filed in 2018. Hence it is found to be filed

well within limitation.

13. Since the Respondent did not file its Reply/objection to the

present IB petition, it goes uncontested. Hence the Debts which

are more than Rs. One Lakh stands admitted and the default in

making repayment of loan goes undisputed. Therefore the present

IB petition is found to be filed in conformity with the provisions of

the Code and rules, regulations made thereunder. Hence is found

complete and CIRP can be triggered in respect of present

Respondent. For the aforesaid reasons, the present IB petition

deserves for Admission.


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14. Further the Petitioner has proposed the name of Mr. Sameer

Kakar, Registration No. IBBI/IPA-001/IP-P00218/2017-

18/10418, as the Interim Resolution Professional of the

Respondent. He has filed his written communication by accepting

the proposed Assignment in prescribed format/s as per provision

made under the IBC and rules, regulations made thereunder and

also declare that there is no pending disciplinary proceedings

against him before IBBI. The same is accepted and taken on

record.

15. On perusal of the documents annexed with the IB petition it is

found that the Respondent/Corporate Debtor has committed

default in repayment of debt. The disbursement of loan amount is

substantiated by the Statement of accounts of the Petitioner. The

Liability of the Respondent Corporate Debtor is also reflected in

ledger account of the Respondent in the books of the Petitioner.

Therefore it is a fit case where the CIRP can be triggered in respect

of the present Corporate Debtor.

16. Therefore the Present IB petition bearing CP(IB)-

4289/MB/2018 filed by Edelweiss Asset Reconstruction

Company Limited, is Admitted and Corporate Insolvency

Resolution Process (CIRP) is Ordered to be commenced

forthwith in respect of M/s Siddharth World Trade Private

Limited [CIN: U15202GA2008PTC005652] in respect of the


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Corporate Debtor there shall be a moratorium under section 14

of the IBC, with following Directions :-

(i) The institution of suits or continuation of pending suits

or proceedings against the Respondent including

execution of any judgment, decree or order in any court

of law, tribunal, arbitration panel or other authority;

(ii) Transferring, encumbering, alienating or disposing of by

the Respondent any of its assets or any legal right or

beneficial interest therein;

(iii) Any action to foreclose, recover or enforce any security

interest created by the Respondent in respect of its

property including any action under the Securitisation

and Reconstruction of Financial Assets and

Enforcement of Security Interest (Sarfaesi) Act, 2002;

(iv) The recovery of any property by an owner or lessor

where such property is occupied by or in possession of

the Respondent.

(b) Notwithstanding the above, during the period of

moratorium:-

(i) The supply of essential goods or services to the corporate

debtor, if continuing, shall not be terminated or

suspended or interrupted during the moratorium period;


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(ii) That the provisions of sub-section (1) of section 14 of

the IBC shall not apply to such transactions as may be

notified by the Central Government in consultation

with any sectoral regulator;

(c) The moratorium shall have effect from the date of this order

till the completion of the CIRP or until this Adjudicating

Authority approves the Resolution Plan under sub-section

(1) of section 31 of the IBC or passes an order for

Liquidation of Respondent under section 33 of the IBC, as

the case may be.

(d) Public announcement of the CIRP shall be made

immediately as specified under section 13 of the IBC read

with regulation 6 of the Insolvency & Bankruptcy Board of

India (Insolvency Resolution Process for Corporate Persons)

Regulations, 2016.

(e) This Adjudicating Authority hereby appoints Mr. Sameer

Kakar, Registration No. IBBI/IPA-001/IP-P00218/2017-

18/10418, Mobile no. :- 9870150251, email :-

[email protected] as Interim Resolution Professional

(IRP) of the Respondent to carry out the functions as per the

IBC. The fee payable to IRP or, as the case may be, the RP

shall be compliant with such Regulations, Circulars and

Directions issued/as may be issued by the Insolvency and


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Bankruptcy Board of India (IBBI). The IRP shall carry out

his functions as contemplated by sections 15, 17, 18, 19, 20

and 21 of the IBC and shall submit periodical report

regarding the progress of CIRP as stipulated in the Code,

Rules, Regulations etc.

(f) During the CIRP Period, the management of the

Respondent shall vest in the IRP or, as the case may be, the

RP in terms of section 17 of the IBC. The officers and

managers of the Respondent shall provide all documents in

their possession and furnish every information in their

knowledge to the IRP within a period of one week from the

date of receipt of this Order, in default of which coercive

steps will follow.

(g) The Petitioner shall deposit a sum of Rs..3,00,000/- (Rupees

three lakhs only) with the IRP to meet the expenses arising

out of issuing public notice and inviting claims. These

expenses are subject to approval by the Committee of

Creditors (CoC).

(h) The Registry is directed to communicate this Order to the

Petitioner, the Respondent and the IRP by Speed Post and

email immediately.


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(i) A copy of this Order be sent to the Registrar of Companies,

Maharashtra, Mumbai, for updating the Master Data of the

Respondent.

Sd/- Sd/- S

RAVIKUMAR DURAISAMY H.P. CHATURVEDI Member (Technical) Member (Judicial)

Siddharth World Trade Private Limited & Ors.

Documents

Transcript of Siddharth World Trade Private Limited & Ors.